The effect of increasing health disaster risk and public spending on economy conditions: a DSGE perspective

Abstract

PurposeThe main motivation of the present study is to understand the severity of the effect of health shock on Iran's oil economy and analyze the role of government under these conditions.Design/methodology/approachDynamic stochastic general equilibrium (DSGE) models can show the precise interactions between market decision-makers in the context of general equilibrium. Since the duration of the virus outbreak and its effect on the economy is not known, it is more appropriate to use these models.FindingsThe results of the survey of hands-on policies scenarios compared to the state of hands-off policy indicate that the effect of government expending shocks on the economy under pandemic disease conditions has much less feedback on macroeconomic variables.Originality/valueAs a proposed policy, it is recommended that the government play a stabilizing role under pandemic disease conditions.Key messages There is no study regarding health shock and its economic effects in Iran using DSGE models. Also, in foreign studies, the health shock in an oil economy has not been modeled.The general idea in the present study is how the prevalence of a pandemic infectious disease affects the dynamics of macroeconomic variables.In three different scenarios, according to the persistence of health disaster risk and the deterioration rate of health capital due to this shock, the model is simulated.In modeling pandemic diseases, quarantine hours are considered as part of the total time of individuals.According to the research findings, it is recommended that the government, as a policy-maker, play a stabilizing role under pandemic crises conditions.

IJHG Review 28.2

“…Furthermore, reviewers commented that the narrow definition of safety based on harm reduction/elimination is not congruent with a multi-faceted approach and that focusing solely on nursing responsibility takes a backward step from the team approach to healthcare governance, acknowledged as the most effective. Nevertheless, the reviewers and editors felt that this article makes a significant contribution to the discussions around patient safety within the context of health governance and, therefore, welcomed its inclusion in this issue.This review is based on: Keshavarzi and Horry (2023), the effect of increasing health disaster risk and public spending on economic conditions: a DSGE perspective…”

“…This review is based on: Keshavarzi and Horry (2023), the effect of increasing health disaster risk and public spending on economic conditions: a DSGE perspective…”

“…The disturbance to economic equilibrium which interested Keshavarzi and Horry (2023) was the effect of a major health shock such as the recent global COVID-19 pandemic. A major health crisis such as a pandemic has many escalating repercussions.…”

“…(2) This review is based on: Keshavarzi and Horry (2023), the effect of increasing health disaster risk and public spending on economic conditions: a DSGE perspective Health disaster and public spending: lessons from Iran Keshavaerzi and Horry ( 2023) have produced an ambitious study which attempts to explain the effects of a major health shock such as a pandemic on a nation's economy. Some of the complexities of this investigation lie in the fact that personal, commercial and government spending priorities are all altered by health shock conditions.…”

“…Keshavaerzi and Horry (2023) have produced an ambitious study which attempts to explain the effects of a major health shock such as a pandemic on a nation's economy. Some of the complexities of this investigation lie in the fact that personal, commercial and government spending priorities are all altered by health shock conditions.…”